2014 – A Fine Year for the Department of Justice

The US Department of Justice had one fine year fighting cartels in 2014, with its Antitrust Division collecting $1.861 billion in criminal fines and penalties for the fiscal year ending 30 September 2014. The Department’s announcement provides us with a timely opportunity to look into these penalties and those imposed for the year in Australia.

Bill Baer, the Assistant Attorney General for the Antitrust Division, was quoted as saying that “the size of these penalties is an unfortunate reminder of the powerful temptation to cheat the American consumer and profit from collusion” and that the division remains “committed to ensuring that corporations and individuals who collude face serious consequences for their crimes”.

In addition, the fiscal year of 2014 saw jail terms imposed for 21 individual defendants, with the average sentence sitting at 26 months. While the penalties imposed may not be as hefty in Australia, the enforcement priorities and strategies largely mirror that of the Department of Justice.

ACCC

Similarly to the Antitrust Division, ACCC remains prepared to aggressively seek penalties for contraventions of the Competition and Consumer Act2010 (Cth) and the courts are focussing on the appropriateness of the penalties put forward either as part of a regulatory settlement or contested hearing.

In Australia, 2014 saw the ACCC continue its strong focus on enforcing cartels and combating other anti-competitive conduct. On 28 March 2014, the Federal Court handed down a total pecuniary penalty of $11 million after finding that a party had engaged in a number of contraventions by attempting to induce various international airlines to enter into unlawful price-fixing arrangements. The case is of particular significance because it is the largest ever penalty for “attempted” contraventions. The decisions on both liability and penalty have been appealed; and the ACCC is also cross-appealing.

We eagerly await what the year of 2015 will bring, with ACCC Chairman Rod Sims set to announce the regulator’s enforcement priorities for 2015 on 19 February 2015.